Written by Alena Khaitsina, Head of Manual QA at Noda
The fintech sector is growing at an unprecedented pace. With more people relying on digital solutions for banking, investing, and payments, ensuring the security of these systems has become crucial. Unfortunately, as technology advances, so do the tools and techniques used by cybercriminals.
The Rising Threat Landscape
A Growing Target for Cybercrime
Cyberattacks have more than doubled since the pandemic and continue to grow in sophistication and impact. Not only is the number of cyberattacks growing, but incidents are becoming more sophisticated and dangerous.
According to the Global Financial Stability Report, the risk of extreme losses from cyber incidents is increasing. The size of these extreme losses has more than quadrupled since 2017 to $2.5 billion. And indirect losses like repetitional damage or security upgrades are substantially higher.
Third-party exposure
Cybercriminals can get around security systems by hacking less-protected networks belonging to third parties that have privileged access to the hacker’s primary target.
For example: A third-party vendor is used to manage your customers' passwords. The third-party shifted to a hybrid work model over the past few years. During an ongoing due diligence review, you discover that their information security policy has no mention of virtual private networks (VPNs) or multi-factor authentication (MFA) for remote access. As a result, your organization is exposed to information security risks and potential data breaches that can affect your customers.
Configuration mistakes
A configuration issue can be as simple as using weak passwords or a more complex problem, such as improperly set up firewalls.
Here are some of the most common configuration issues that lead to cyberattacks:
- Failure to change device default configuration
- Network segmentation
- Not updating/patching computer software
- Using Weak Passwords
Why Security Testing is Critical
Fintech products often handle highly sensitive information, including personal identification details, bank account numbers, and credit card information.
Security testing isn’t optional — it’s essential. It protects sensitive financial data, safeguards user trust, and ensures regulatory compliance.
What should be done? There are some ideas on what be implemented in the software development process according to Secure Software Development Lifecycle (SSDLC):
- Vulnerability Scanning: Regularly scan your application and its dependencies for vulnerabilities using automated tools.
- Penetration Testing: Regularly perform penetration testing (ethical hacking) to identify vulnerabilities before malicious actors do.
- API Security Testing: Test your APIs for common vulnerabilities like injection attacks, authentication flaws, and data exposure.
- Security Code Reviews: Conduct regular security-focused code reviews to identify potential vulnerabilities early.
- DevSecOps: Adopt DevSecOps principles to integrate security into your DevOps pipeline. This involves automating security tests, monitoring, and patching during the CI/CD process.
The Benefits of Security Testing
Building Customer Trust
Trust is a cornerstone of the financial services industry. Customers expect their financial data to be secure and are increasingly aware of the potential risks associated with online transactions. By implementing rigorous security testing protocols, fintech companies can demonstrate their commitment to protecting customer data.
Regulatory Compliance
Fintech companies operate in a heavily regulated environment. Non-compliance with security regulations can result in hefty fines and sanctions. Regular security testing helps ensure that products meet regulatory requirements, thereby avoiding legal issues and maintaining operational continuity. Staying ahead of compliance demands also positions companies favorably in the eyes of regulators and investors.
Mitigating Risks
Security testing is an essential risk management strategy. It enables fintech companies to identify potential vulnerabilities before they can be exploited. By employing various testing methods, such as penetration testing, vulnerability assessments, and code reviews, organizations can proactively address weaknesses in their systems. This approach not only reduces the likelihood of incidents but also minimises the impact should a breach occur.
Enhancing Product Reliability
Security testing contributes to the overall reliability of fintech products. A product that is secure is inherently more robust, leading to fewer downtimes and disruptions. This reliability is crucial for maintaining service levels and ensuring that customers can access their financial resources without interruption, thereby enhancing user experience.
Continuous Improvement: The Key to Staying Secure
Security testing should not be a one-time event, but an ongoing process integrated into the software development lifecycle. By continuously testing and improving security measures, fintech companies can adapt to new challenges, ensuring their products remain secure in the face of evolving threats.
Also, security testing is not just an added layer of protection for fintech products; it is a fundamental requirement for success in the industry. By prioritizing security testing, fintech companies can protect sensitive data, build customer trust, ensure regulatory compliance, mitigate risks, enhance product reliability, and foster continuous improvement. As the digital finance landscape continues to grow, the importance of security testing will only increase, making it an indispensable element of any fintech strategy
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